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tv   Fast Money Halftime Report  CNBC  October 9, 2012 12:00pm-1:00pm EDT

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and that is a big winner given everything else today. that does it for us on "squawk on the street." back to wapner and the fast money halftime at hq. thanks so much. welcome to the halftime show. four hours to go until the close and here is where we stand. red all over the board. the industrials pushing down decline of nearly 90 points and the nasdaq over my shoulder is seeing the billinger decline, 1.5% and apple has a lot to do with that and we'll talk all about that. here is what else we're following on halftime today, machines gone wild. how a mysterious computer program is dominating trading activity and what it says about man's diminishing role in the markets. bracing for earnings, the outlook is ugly and will the numbers really be that bad? can the rally survive if they are? first, our top story, the apple correction. the stock officially down more than 10% from its peak in late
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september. that slide is raising questions about whether america's most loved and valuable company has suddenly lost its mojo. we're trading the pullback with joel terranova, josh brown, mike murphy and gema godfrey and he hedge fund manager doug cass. the stock that could do nothing wrong suddenly can't get a pop. >> yes, i think there is three reasons. one, market, two, technical, third, the issue of first mover advantage. i think firstly when everyone has gotten finally comfortable with this huge disconnect between weakening corporate profits and improving stock prices and continue ad nauseam in pardon because of this ridiculous notion of performance chasing, and this global monetary easing put which would trump the challenge to earnings it became time to be concerned when stocks started to fade if you look at last week's rally it was poor and virtually non-existent. apple sat up there at 700, up
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70% for the year and vulnerable to profit taking and became an institutional source of funds, and i think in broad terms innovation has a history of impacting every tech market and ultimately results in product home general anyway at this and degradation of profitability, and i think the concern regarding apple have cropped up, first mover advantage seems to be narrowed or in jeopardy owing to supply chain issues, product quality issues, and apple used to have market defining product that was clearly better than the competition. >> it still does, doesn't it? that hasn't changed in the last two weeks, has it? >> it has changed with the supply chain issues and the quality of a product they're delivering. this he have massive delivery issues considering the growing size of the company and it seems to me that the company is starting when you look at the iphone 5, the point they made in barons over the weekend, more trying to protect the franchise
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as competitors catch up like samsung. >> let's get the traders involved in this conversation. joe, this is a company taking arrows from all sides. >> right. >> people taking profits. you have the community at large now saying, well, the new phone isn't as good as we thought it was going to be. there is a purple haze over it. the map gate issue. now all of the negatives are coming out when this company could do no wrong. >> make the distinction. you're saying people taking profits. doug, make the distinction for the view ers. is this institutional selling, passive dollars getting out of apple or just a correction by the trading community, and i throw it back to you now. you made a great call on apple. i know you well. am i going to see five, six day from now on twitter say apple is cheap enough here at 600 or 605 and i will buy it or are you that afraid that it is a massive structural shift in the stock? >> i would say that it is not black or white as you describe, joe. it is more gray.
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we have to watch to see if this first mover advantage is protected, that they can deliver enough product in terms of quantity and quality. it is not something that, look, apple shares could turn around in a nanosecond. for a variety of reasons, over sold, the large seller will have completed, but there are for the first time chinks or bruises in the apple story. >> jema godfrey, as you watch what's happening over the last couple weeks and the stock pulled back, it is america's most loved company, america's most profitable, valuable, publicly traded company there is and yet suddenly we're questioning the fundamentals and the technicals together. >> also it shows that you can't ignore the fundamentals of the economy. it shows that however much you do love this company and however strong corporate balance sheets are, you still have a certain amount of uncertainty and in
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this environment voss will lock in profits and take time to relax and reassess the environment. you have elections, fiscal cliff, the eurozone uncertainty and in that type of environment it is a case of i know things are strong when i get out and look to get back in later on. >> josh brown, what do you do with apple here? do you use the pullback as substantial as it has been, 10% from a peak at the end of september? do you use it as a buying opportunity or a flag in your face that says i have got real reason to worry here? >> i would caution anyone who is booking a funeral home for the final passage of the apple story. i think that's a little premature. technically speaking, we have big volume coming to google and apple and it is the same funds that own both these stocks. nobody should be surprised there is a dip at the beginning of the quarter. i think when have you a quarter where stocks out perform bonds to such a massive degree which is clearly what we saw here, you are going to see people rebalance out of equities,
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rebalance into stocks and apple is not immune to that. it is a huge chunk of the nasdaq and the s&p as we always say so you have to remember this is a stock. the one thing i would do, scott, if you're long or looking to buy or if you are wondering whether it is time to take some off, i want you to take this and divide it by ten and pretend it is a $63 stock that came down from 70 and how would that change your view because people tend to look at 70 and 80-point price swings and they lose all perspective. what you're seeing with apple is a reaction to the fact that stocks are -- people are coming out of stocks and apple is one more stock. i do not believe that the iphone 5 is the death of the company. >> getting back to joe's question, i think the key will be does the new iphone 5 entice old users to upgrade? if the upgrade cycle is lengthening, that indeed is
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something of a -- not a death nail, but a big hurt to apple and that has to be monitored. >> doug, a degree with you. let's remember a couple of things. a lot of the short-term action we're seeing is technically driven, not necessarily fundamentally driven and if you look at the way apple traded today t came right down to where everyone said there was support, 616 to 620. look how quickly it bounced. if it closes at these levels, you have a pattern where people say we saw the dip and it is all clear. >> that's the question that people want to know. mike murphy, that's the only question that matters right here. should you use this pullback and that's what the viewers want to know. should you use the pull back as an opportunity to get into apple and an opportunity that you may not have again and you don't get that often? >> absolutely. i don't know why you wouldn' here. we went in today. we sold puts on apple where we're buying the stock around 620 which happens to be as josh mentioned the 100 take moving average on the company. i will take the other side from
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dug a little bit. i don't see the iphone 5 slowing down or hurting the company. quite the contrary, i think the iphone 5 will be a massive home run for apple. i think this is a tradeable pullback on the stock. you want to go in anywhere around 620. if you want to sell puts trade it through the options. anybody who is out there saying 700, i would buy this on a pullback, there is nothing fundamentally that has changed that would make you not. >> something fundamentally has changed. it is quality versus price. apple is now selling lessor equal for more money. the company used to sell a better product tore more money which is a great strategy. its products were simply market defining and competitors were in close. recently things are changing and competitors are catching up to the first mover advantage. >> you mean like a samsung? >> yes. >> i mean, so samsung, i will take the side samsung and apple can both do well here. i look at apple's product. if samsung has a good product or almost as good product, that's
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fine. apple has enough out there with their entire halo effect that with the phones, with the laptops, with the ipads, ipad mini, apple tv, i think that fundamentally apple is still going to be one of the cheapest stocks out there on a fundamental basis. >> doug, thanks for joining us as always. dwraet to have your insight. >> is there a fundamental reason for apple's slide? brian white follows apple for tow peek owe capital markets and is in china checking out the supply chain and joins us live on the fast line. welcome. >> hi, scott. >> are there real reasons for concern? you have boots on the ground over there. >> absolutely not. i look at this pullback as a gift ahead of the holidays. we had a big pullback last october, came on cnbc at $400. we said buy this stock. people thought we were crazy. it went to 700 in a year. i look at the stock today
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trading at ten times x cash and they just put out the biggest launch in their history, up 100% year-over-year in preorders, and it is a home run. they're sold out around the world. >> so you say it is nothing to worry about. i am reading your note. october 9, 2012, the supply chain continues to struggle with yields and this is especially true for the iphone 5, you say, as such we estimate that the iphone 5 could be 32 million to 40 million in the december quarter, rather than the 40 to 50 million that many had believed was possible ahead of the debut. that says problem to me. why do you say no problem now? >> so there are supply constraints. they're not going to be lost orders. there is issues in the supply chain in producing the demand that's out there. so demand is overwhelming supply, but that will be fixed in short order. in the december quarter we're conservatively talking about a 32 to $40 million or million
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unit number. there is still some people out there that think 50 million. >> it is josh brown. i am curious. do you see any parallels to i forget if it is iphone 2 or 3 with an issue with the antenna based on where people were holding it and the stock was punished for 50 or 100 points and people realized, oh, wait a minute, this is not actually a legitimate reason to whack 10% off apple's market cap and it came right back. do you see this purple haze issue that's hitting the blog owe sphere as a parallel? >> i see a lot of these issues as a parallel. remember, steve jobs came back from a vacation for the iphone 4 antenna gate issue. >> 4, right. >> the 4. they went through other issues that smartphones had, wasn't really a problem. some people had problems. it went away very quickly. this is the most valuable company on the face of the planet. there is a lot of media coverage
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around it, and there is a lot of good press that goes out there when things go negative or positive on apple. it is very bipolar. i notice when things go negative, then people start questioning and stock goes down and they question the fundamentals and the fundamentals here are very, very strong. things aren't perfect. supply chain is not perfect. the ipad had issues on the displays. they were quickly reconciled and they went on to be home runs. this will be no different. >> brian, thanks for checking in with us. >> thanks. >> brian white. coming up, the biggest calls on the street and machines gone wild, the mysterious algorithm accounting for 4% of trading activity last week alone. new details on this developing story, and netflix soaring over the past two weeks. take the money and run in netflix in the halftime kue when we return.
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welcome back to the halftime report. unusual trading activity yet again today. let's get to bob with the latest. bob, what do we know about a number of stocks that have seen some wild swings today? >> i am not sure about wild swings here. i did speak to the nyse. they said they're looking into it. they haven't seen any unusual activity and they noted that no circuit breaker has been activated here. i did call the nasdaq to get comment from them and haven't heard back from them yet. there was a trade of pandora on the high side. i talked to eric scott huntster about it just before 11:00. appears to have been canceled. i think it was only one that was there. there may have been individual trades here that occurred that were a bit unusual, but so far
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it doesn't seem to have triggered anything. >> the charts do look like suspicious, though. when you mentioned hunts eter, he is with nanex. >> he wasn't aware of it either. he looked into it and said there is a couple here and the numbers are very small. they're very small trades so far. i would wait until we get a little more information. the important thing is we didn't see anything triggered. we didn't see any circuit breakers triggered or anything like this and i would like a little more information. >> bob, stick with us. new information is raising troubling questions about how much sway high speed computers really have over the markets. according to nanex which we just mentioned, which does track computer trading trends, a single mysterious algorithm controlled 4% of all trading activity last week and never made a single trade. so amon jabbers joins us, and i
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am wondering what the regulators think when they hear something like that, 4% of all trading activity controlled by a singleal bow rsingle single algorithm and not a single trade. >> the problem is they don't see this realtime high frequency trading data. they don't see the prop feeds in the same way the high frequency traders can see them. the sec is making a big fush to catch up and coming up from way behind. they have a new program they will buy from a high frequency trading firm called trade works, a computer system that will allow them to see the data as close to realtime as possible and they also opened up a new office of research and analytics that will help them understand some of the higher frequency trading strategies and figure out why these guys are doing this and whether they have any merit economically or tactical
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things to gum up the works and slow things down for everybody else and speeding up trades for themselves. a lot of catching up going on right now. >> i would note that one of the things the sec is trying to do is get a consolidated audit trail together. >> right. >> where they can track all of this and this is related to what amon is talking about in realtime and figure out exactly what's going on. one of the problems with the flash crash, they had a difficult time putting together the history even of a single day of what went on because we're so fractionateed now. >> it is great we have jema godfrey with us today, the quantum physicist, and you understand the effort to build high speed, faster, bigger, stronger computers. >> exactly. >> that's what we're up against. >> it means the problem will only get tougher and something does have to be done about it. it is very hard to police. the reason, we alluded to, first of all, the night of that he is trades and how can you tell what the nature is, whether it was for speculation or for liquidity and price discovery?
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also, secondly, it is about these trades being withdrawn and so there have been a lot of talk about maybe holding periods and how can you enforce that? what's a minimum holding period? as computers do get faster and i think we will talk about this later but the nobel prize being awarded to advancements in potentially quantum computing, it is something we'll grapple with. >> suppose we had a minimal holding period of time, can i ask the question? >> of course. go ahead. >> suppose a minimal holding period of half a second. what would prevent the high frequency traders to program the computers to trade after a half a second? do you think they would be tremendously disadvantaged or they would have the advantage half a second later. >> that's back to the first point about the nature of the trade. it isn't just about fast trades. you can manipulate the markets by slow trading and dripping into the market. it is more about the intent behind it and it is incredibly hard to siefr from the data. >> i wonder what the whole role of co-location played in the
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entire discussion and whether it simply all comes down to that, the fact that the high frequency traders, the big guys are putting their computers right next to the exchanges's own computers in an effort to gain a competitive advantage which most people seem to acknowledge exists but yet we're not doing anything about it. >> that's the business model, though. it is 80% of the new york stock exchange's business. it can't be a full time tv studio. it has to earn money somehow. the answer is not you limiting electronic trading. it is taxing or legislating against the stuff that has absolutely no benefit to anyone and so cancel voters is a good example. i think the point that ms. godfrey made about intent is the point. >> there is no intent to trade stocks at 4% of the entire trading volume and last week not a single trade was executed. >> i agree.
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>> one thing about this and i think our guests will confirm this, there are only a certain number of algorithms in the world. i think you agree most are similar in intent, basically designed to scalp pennies in microseconds. there are only so many different kinds. i don't know if that's the point. the question is what can we do to eliminate the evil or bad side of what's going on here which i agree is a problem? >> bob, thanks. amon to you as well and all of you guys. >> real quickly, talking about regulation and talking about measures in the marketplace and the most simplistic and proven throughout the ages is finances, the cost of business. raise the cost of doing business just like driving on a highway. you go too fast, you get a ticket. same thing in the marketplace. >> that might damage liquidity, though. >> no. i think it protects the integrity of the marketplace itself and the request i had is there and the liquidity is fine. >> as we take a break, take a look at where we stand in the market today, the s&p and nasdaq
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have come off the session lows just a bit. still a down day on the street, the s&p giving back three quarters of 1% and the nasdaq decline steeper and you can see the bounce there a couple moments ago. the case for and against selling tech and the anniversary of the s&p 500's all-time high and what it will take to get become to those levels and protests marking merkel's first trip to grease since the debt crisis began. [ male announcer ] this is sheldon, whose long dy setting up the news
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welcome back to halftime report. i am mary thompson. let's take a look at shares cliff's natural resources. we're seeing gains in iron ore prices, this in turn is causing the stock to move higher as well. there you can see up 3.25%. also taking a look at coal stocks in an otherwise down market and they, too, are up for a second straight session. back to you. >> thanks. how about it? do you like either of that he is names? >> the cliff set up is real interesting, bumping it,
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regained the 50-day moving average and running into the 100-day moving average and announcing earnings later this month. i think the story with cliff, we know that iron ore prices are increasing. that's helped the stock here. remember, these guys are fundamentally a great dividend, paying close to 6% dividend. it is above the 100, i want the name here. if iron ore prices will move higher. >> tonight alcoa kicks off what's expected to be an ugly earnings season and things looking especially bleak for tech and with apple shares in correction mode. should you just stay away from tech? let's go to jackie deangeles, the host of an online show on cnbc.com called futures now. >> the online show is burning up the web. more on that in a second. the apple sell off created technical difficulties for the nasdaq. just moments ago the nasdaq 100 breaking below the 50-day moving average and apple of course making up almost a fifth of nasdaq 100 which raises the question will apple tank tech
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and is the best earnings move to short the nasdaq? let's talk futures. rachel is at the cme in chicago and anthony is at the nymex in new york. anthony, start with you. >> you can make a case that you want to sell both. yes, the nasdaq is weighted more in tech, so the case is apple does have headwinds. the iphone 5 initial sales were great and now they're not so great. this he have problems in the fox plant and tablet, the smaller tablet has a lower margin rate. it is really do you think teches will get harder than the broader market and that's the play you have to make. do you sell the nasdaq or the mini s&p? >> take a look at this run for the last three months. tech led the way. it was all about apple. take a look at the chart. day after day it was the nasdaq 100 that head the charge and why wouldn't it not reversal point? as you noted, we got the earnings and the expectations and now we're coming to the election season and i think you
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have a little bit of delevering here and not all nasdaq is bad. you have google. you have oracle, taking another good percent there so there are points that you want to stick with or stocks you want to stick with and i had customers calling me when apple stocks hit 700 asking how do you hedge up here a little bit and i suggested with a 20% part of the nasdaq sell many nasdaq foughts get a little bit short and keep your stock if you like and if our long-term guy, i think this is a great opportunity to make a little buck on the downside. >> sounds like you're saying brace yourself with earnings season with some exceptions, of course, and give us the trade. how are we going to make money off this? >> we put this off the trade desk this morning. we sold the 50-day moving average at 2771. i put a stop simply above the over night high at 2801 and then on the downside i am looking 2690. we saw a little support in the 2735 area which we called for. we're looking at a little
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bounce. if we close below that, i am looking at 2690 on the buy side. basically this trade looks like i am risking $600 to make 1620. i like that trade. >> we're selling the nasdaq 100. scott, do you want to jump in with a question? >> what are the other signs you will look for to know whether the nasdaq will pull back along with tech further? you have intel downgraded today, too. >> i want confirmation with the broader market. anthony touched on it as well. maybe sell the s&p. listen, we want confirmation around the board. i am a little bit surprised that we're not getting a sell off in crude oil. i think that would be another confirmation i would look for, sell off in crude and s&p and the nasdaq as well. >> i think you're looking at the dollar move toads and i think that's supporting the crude oil right now and as i said before, that market has been all over the place. yes, teches have been weak but i am looking for broader in the market. >> you know how they're making money in the commodity pits.
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what about you? do you think earnings will be better than expected? log on and we'll reveal the results on the live show today at 1 p.m. eastern. tune in. we will talk exclusively with randy smallwood, silver selling off today and we'll ask him where he thinks it is going. log on, futuresnow.cnbc.com. 1 p.m. for that interview. back over to you. >> thank you very much and to the futures crew and here is what's up next on halftime. what it will take to keep the bulls in play, exactly five years after the s&p 500 hits the all-time high, halftime is back in two minutes. ♪
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take a look at the crude oil. look at the move into the afternoon, up more than 3%. joe, what do you make of what's happening here? somewhat unusual. >> turkey and syria and the u.s. dollar which is actually higher today which suggests oil prices should be moving lower. when most people are searching for a reason the market is moving higher it will tell you the direction will continue to go higher. i would not fight this. i would not short this. i think it is about geopolitical tensions and worries and what potentially may result from syria and turkey is a lot of pipelines with turkey. >> how much do you think it has to do with global growth, concerns about where the world is going? the imf coming out with another down grade of growth. >> it is true. that's what makes this move very interesting. actually if you have global growth concerns you expect downward pressure.
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>> that's why i am surprised in the face of the imf and all the reasons in the world and noise about the spr, right, and all the reasons in the world, guys, why you think this chart would look differently. >> that shows it is more likely speculation as opposed to longer term bullishness and fundamentals that makes us a bit more cautious on this move. >> josh, make any moves because of this? >> i am not sure this is something i would want to react to because as the other panelists suggested, there is a geopolitical aspect to crude's rise, and i am not sure i can make heads or tails of whether or not syria is actually going to actually attack turkey and going to attack syria, whatever the case. that is not my game. it could be a blip and let's not over react and start putting on trades. >> yeah. all right. a big day on the street as analysts jockey for earnings season and here are today's top three calls. j & j cut to tell at goldman on look of a transformational pipeline. joey? >> this is really a note about big pharma itself within it,
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yes, they talk about the capital allocation strategy and not being as robust as others in the space and also talk about the valuation being full. look what they said about lilly, a sell to a neutral and highlight the flavor ability. i think you go to the etf and the xlt and it gets you the big pharma names. >> lilly is up today. >> lilly is up, kind of coming back, rising into the valuation, strong performance year-to-date, and i just want to be diversified. i think the whole space is attractive. >> radioshack getting love from bank of america and merrill lynch. >> i would say that this is a disappointing reaction. it is a $220 million market cap and a stock that is down about 90 something%. the fact sha it is only up 4% says there is not a lot of enthusiasm for this call.
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keep in mind, 40% of the float is short. this thing should be up like 15% and it is not. >> you are hard to please. >> i am. i am tough today. >> window into your world today. ford named a top pick over at morgan stanley because it is closely tied to a housing recovery and european restructuring. >> a degree with this. the set up on ford is it broke down from about the $13 range, came all the way down to 9 and morgan stanley is out today and calling it a derivative play on housing and take the price target up and make really good points that every recovery, as the recovery in housing picks up, it is going to add at least ten cents to the bottom line and they talk about the exposure to china. it is really a way to play u.s.-based recovery. i like the call here and i like the name. >> wait a minute. doesn't ford and hasn't ford had absolutely dreadful results in europe and they keep talking about how bad they are and they don't seem to think they're getting better any time soon. >> right.
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well, that was about six months ago and those results started to come out, scott, and right now at these levels around $10, it is trading 6.5 times so there is a lot of exposure to europe and you're making a play on the european recovery and that's why you get it down to 6.5 times earnings. >> five years ago today the dow and s&p hit all time closing highs, a financial crisis and european debt debacle and stocks are not that far away from the historic levels. can we get back there? jim paulson joins us now with his outlook. welcome back. >> thanks, scott. >> face of all of this, you still have a pretty aggressive target going into year's end. >> i do. i have been at 1500 all year and i think that's a reasonable target for the s&p 500. we could well take out the new all-time highs next year, and i guess i think there is two big things, scott, many things that affect the market of course. we'll get by the uncertain
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election and beyond the fiscal cliff, and i look at two big catalysts going into next year. one is we have to get the emerging world economic recovery going again and secondly we need to develop an attitude in this country that the u.s. recovery is not just on life support from the fed but a sustainable inherently growing animal. i think we might accomplish both of those. the chinese officials have been bizly working and dropping the shibor rate to slightly over 3. the real money supply is rising in that country and with a year's leg i think china might pick up in the early part of next year. if that happens, it does a lot of good things. it gives us a sense the global recovery is sustainable and makes us less dependent or even caring that much about europe, and thirdly, it helps the united states manufacturer sector which i think has been really tied to the emerging world growth story.
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>> are you looking, then, at q3 earnings then as the trough? i am just trying to get into my head here and how with earnings decelerating with global growth slowing, stocks continue to go higher. >> i think it is a conundrum for people all year long, and even now. >> it has to end soon, doesn't it? >> i don't think so. we already created earnings. earnings have been above previous cycle peak for some time all year long. what we're doing is revaluing the valuation of these earnings. this is about a year where the multiple is climbing and it is because confidence is climbing and the sustainability of the global recovery i think, scott. that's been the catalyst for 2012. i think it will get more so. we will get a little earnings growth and i think the big thing is are we going to be trading at the end of next year, for example, at 16 or 17 rather than 13 or 14?
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that's the essence of what i think is the real opportunity. here i already think we're seeing the elements of sustainability. we're seeing it unemployment rate am coming down even though the labor force is growing and seeing confidence in a four-year high and housing activity rising for the first time, and we're seeing home prices rising. we're seeing bank lending rising for the first time. we're seeing auto sales back to a 15 million annual right and all while people are worrying about how weak things are and we're growing about 2.3% in the last year and if we up that a little towards 3% by regetting back manufacturing, i think that you could see a lot of upward tilt to the market and even if earnings, you know, only grow maybe 5% over the next 12 months. >> jim paulson, thanks very much. >> thanks for having me. >> good to have you on. have you back soon. does this make sense to you? 1500 price target s&p, and not worried about earnings decelerating? >> the thing is we're very confident on the outlook longer term. there is a lot of cash on the
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balance sheets and you need confidence to spend, and one of the comments that jim made i caveat and he said europe doesn't matter. i think if it is a company based in the u.s. and selling domestically, that's 100% correct. if it is export driven company, then it is still going to be a significant head wind and that's what we're concerned about. >> when halftime report returns, unhealthy numbers, a major maker of heart valves warns and german chancellor angela merkel arriving in greece for the first visit since the debt crisis. what's at stake in the eurozone? [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
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coming up on power lunch at 1 p.m. eastern, stocks sinking on this five year anniversary and what will it take to restore investors confidence in the market? maybe risk. we'll talk about the game of risk, exclusive data on which banks are best at managing risk since the financial crisis and which banks in our poll are raising red flags. plus, the political race not many are focusing on but one that could have a huge impact on the fiscal cliff. that story on power lunch. see you in about 14 minutes. angela merkel is in europe for the first time since the debt crisis began and rather than boosting the currency the euro is down versus the dollar. there you see it, 128 and
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change. what is the best way to play that dip? let's bring in paul richards with more. welcome back. >> scott, how are you? >> good, thanks. does merkel's trip to greece have any bearing on what happens to the euro dollar or is it all about spain still? >> i think the market was a bit disappointed today and really more political in nature. i think it was a brave visit on her part. she is keeping germany happy and a lot of opponents on what they're asking for in terms of more bailout, more money, and the euro skeptics are saying is she in or is she out? i think it was a smart move by her but political and really i think the focus is still all about spain. >> we're looking at the video now, paul, of the protests greeting ms. merkel in greece. when does the currency experts such as yourself expect spain to officially ask for a bailout? >> there is interesting developments taking place here, scott. the market is starting to think what merkel may be playing here is something a lot bigger,
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something that includes an extension of debt for greece, a bailout to cyprus and spain as one package. now, she would then take that and not get that done in october. she also needs to take the troica report, first. it is increasingly likely that october may be frustrating for the market and may be more likely november, and i think what we get as a result is perhaps a dip in the euro this month followed by a smart rally in november and the market might be surprised at the sheer strength of it. that theory is gaining a lot of power in the market now. >> the euro is certainly not if not resill yant over the last three, four weeks. if you want to make your best trade now would you stay away from euro dollar and look where else. >> i think there is more value in euro yen. it is a terrific proxy for risk in the currency world and i would looking to buy a dip near 125 and risk 98.75 and the trade
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could be worth 105 by the end of november. i would take the dollar out and put it against the yen. >> great to have you back on the show. look forward to having you back again. >> any time. >> jem a i am curious your view since have you a view from the other side of the pond, what you make of the resill yen sigh of the euro lately? >> what it shows is there are potential risks out there in the market. a spanish bailout is inevitable. draghi came out and said he would do anything to support the euro and this bond buying response and fine, that's it, the problem is solved and it really sirnt. the bailout is conditional, conditional and spain requesting a bailout and sticking to certain reform packages and the longer things go on the tougher the terms could be. >> do you have a target in your own mind where you see the euro dollar? i don't know, by the end of the year? . >> it has been incredibly resill yant and moving against rationale, and that is why we're actually kind of staying away from making those calls at the moment and instead looking at
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potentially the equity markets and maybe going back into european equities and taking off u.s. equities because we think that trade may have been a bit over done. that's the way we're the way we enacting. >> interesting. you can catch "money in motion," fridayss, 5:30 p.m., only on cnbc. coming up, a majormaker of heart valves cuts its revenue forecast. and followinging today's pops and drops. stick with us.
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well, remember that little rally netflix was stringing together? it's over. bank of america cutting the stock after its 30% run over the past two weeks. shares plunging today, as you see, 8%. joe terranova, an interesting move. yesterday, you told me this thing was going to like, 75. >> let be accurate. >> no, no, that was accurate. did you say that yesterday? >> yesterday, i actually said 80. >> 80. >> last week, i said 75, 450. you just said the rally is not over. no it's not. listen -- >> i said the rally was over. >> this is a fundamentally challenged company. secular headwinds all over the place. tell me something i don't already know. we know that. the world knows that revisionsing, eps growth, over 7% the last month. i bought the stock today at 67
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bucks after herb greenburg came here and told the whole world in a very proficient fashion how horrible the company is. stock didn't go down once did he that what does that tell? he a lot of short covering, folks not in the trade. low risk, four, five bucks, all you got to risk. >> buying a stock which you admit everyone is a terrible stock. >> terrible. >> i own coin star, verizon, i think they are going to beat the snot out of them, content costs continue to rise, a trading call. this is about trading and focusing in, the selling is saturated in netflix. i agree with whitney tellson on that point. >> josh brown, give me an opinion. >> i hate to keep saying bearish things on this stock. >> right, but that's what everybody keeps saying. >> joe, i don't know where the next three points r that is not my timeframe.
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>> i'm not saying the next three points. you're die fining a $4 risk to potentially make from 65 to, 66 bucks and 80 point on t. >> i guess. but i would say longer term, i will see nut 50s with this thing. >> you selling it? >> i'm not -- i would never -- i don't buy -- the base on this stock is 8. i don't get involved with bat ground stocks. not for me. >> i see what i started. got go healthy week at nbc universal, here at cnb, looking out for your personal and financial well being, today, focus on medical devicemaker edward life sciences, the stock looking sickly after cutting the forecast the third quarter. jb, worst performer in the s & p. chart tellingst the story, down 10%. >> a really good company and i think a teachable moment because this is one of those situations where you have a great company but a really bad time to own it. for people looking at this, buying opportunity you catching a falling knife.
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this stock belongs somewhere in the 70s based on fundamentals and technicals. what happened here is very simple. the company blamed everything, a kitchen sink type of warning. the most notable thing they blamed was austerity cut backs in europe are limiting the amount of the heart valve procedures and your honor about 32% of their revenues in the first half of this year. there is some big competition coming into the heart valve space from boston, from st. jude. i think the stock finds its legs somewhere in the mid-70s. i would not be involve at this point. >> nbc universal's healthy week coverage continues at healthy week.cnbc.com. in the next hour on power lunch, four years after the financial crisis is wall street still rolling the dice when it comes to risk taking? exclusive data coming up on the banks. again, in the next hour. first, our final trades are next seem if joe tara nova is still speaking to me, too. we know you have to rise early...
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